The Deal; Ricoh Co., Ltd. has agreed to acquire Ikon Office Solutions Inc. for $17.23 per share in cash, or about $1.62 billion. The deal price represents a premium of 11 percent over Ikon’s share price prior to the deal announcement. The transaction has been approved by the boards of both companies. The deal still requires regulatory approval in the US, Canada, and Europe. The companies expect the deal to close in the fourth quarter of 2008. Discussion: Ikon sells and leases office equipment. The company markets copiers, printers, fax machines, as well as other office products. Ikon also sells peripherals and supplies such as ink and toner cartridges, labels, paper, document management software, and mailroom supplies. In addition to selling equipment, Ikon also offers services including document management outsourcing, electronic file conversions, facilities management, and training.

Ricoh is one of the world’s largest manufacturers of copy machines. Ricoh also makes fax machines, scanners, and printers, as well as products such as digital cameras, personal computers, servers, software applications, semiconductors, printed circuit boards, and optical data storage drives.

Ricoh expects the deal to help it compete with rival Canon Inc. in the US market. Canon machines currently represent about 60 percent of Ikon’s product sales, while Ricoh products represent about 30 percent. Ricoh hopes to replace Canon sales through Ikon with its own products over the next three to four years.